WASHINGTON – Borrowers paying back student loans should check their inboxes.
President Joe Biden sent emails to more than 150,000 borrowers this week, including 14,510 Texans, with a welcome message that their student debt will be wiped out.
The administration’s latest loan forgiveness initiative comes under the umbrella of what it has dubbed the SAVE plan, which is intended to make repaying student loans easier while offering forgiveness for many of those enrolled.
“The SAVE plan reflects our unapologetic commitment to deliver as much relief as possible to as many borrowers as possible as quickly as possible,” U.S. Secretary of Education Miguel Cardona said Thursday.
More than 7.5 million borrowers have enrolled in the plan, which can reduce monthly payments based on income.
Biden announced the latest loan forgiveness earlier in the week, but the White House waited to unveil the state-by-state breakdown — showing that Texas has the highest number of borrowers granted loan forgiveness and the highest total amount forgiven — just shy of $117 million.
The state owes its top spot largely to having so many people, but it edged out even the more populous California, which will see 13,580 borrowers forgiven a total of about $115 million.
Eligible borrowers must be enrolled in the SAVE plan and have been making payments for at least 10 years. They also must have originally taken out $12,000 or less in loans.
Borrowers who took out less than that amount are disproportionately likely to default, often come from low-income backgrounds and in many cases failed to graduate, according to administration officials.
Loan servicers have started processing the forgiveness, and borrowers’ accounts should be updated in the coming weeks.
Borrowers who didn’t receive an email — double-check that spam folder — can log into www.studentaid.gov or check their loan servicer’s website.
More borrowers will become eligible over time. For every $1,000 borrowed over $12,000, a borrower can receive forgiveness after an additional year of payments.
All SAVE borrowers receive forgiveness after 20 or 25 years, based on whether they have loans from graduate school.
The Education Department plans to regularly identify eligible borrowers enrolled in the SAVE plan and wipe away their loans.
Biden touted the program during an event in California earlier this week, saying he had promised to fix a broken student loan system.
“Because while a college degree is still a ticket to a better life, that ticket is too expensive,” he said. “And too many Americans are still saddled with unsustainable debt in exchange for a college degree.”
The U.S. Supreme Court last summer struck down Biden’s previous sweeping effort to forgive student debt. That plan was rooted in a 2003 law and tied to emergency provisions during the COVID-19 pandemic.
The mass cancellation initiative would have covered millions of Americans and cost an estimated $400 billion, but the court agreed with states that sued to block the plan that the administration had overstepped its authority.
Since that setback, the administration has worked to bolster existing programs and provide relief in a more piecemeal fashion. This week’s round of forgiveness will wipe out about $1.2 billion in debt.
Biden’s efforts on student loan forgiveness have been criticized from several directions. Some who had hoped for a more sweeping response view his current efforts as small potatoes compared to past proposals.
Many Republicans, including Texans, have blasted his push for loan forgiveness as an inappropriate use of taxpayer dollars, shifting hard-earned money from blue-collar workers to college graduates in a bid to drive up support at the polls.
U.S. Sen. Ted Cruz, R-Texas, blasted Biden’s loan forgiveness plan in 2022 by saying it was aimed at buying votes of the “slacker barista who wasted seven years in college studying completely useless things.”
U.S. Rep. Troy Nehls, R-Richmond, aired his objections to this week’s announcement on X, formerly Twitter.
“Joe Biden ‘canceled’ $1.2 billion in student loans while leaving American taxpayers to foot the bill. All in an attempt to gain votes,” Nehls wrote. “If you take out a loan, pay it back. I can’t believe this has to be said.”
